The project will be completed in 2021, and the railway will have a total length of over 414 km linking the Mohan-Boten border gate in northern Laos and the capital.
"About three years ago, there were more tourists, but now there aren't as many. We are earning less money. So we're looking forward to the train happening," Al Jazeera quoted Keomany Soudachan as saying.
Soudachan works at a handicraft shop in Luang Prabang, the ancient world heritage city known for its unique Lao and French architecture.
One of the Laos-China railway stations is planned to stand outside Luang Prabang, which to some extent encourages locals' aspirations for the development of the local tourism industry.
"Many people in small businesses here survive of the tourism industry, so the project of more visitors spending money is welcomed," Al Jazeera reported Saturday.
Houa Vang, a driver working at the railway construction project, has told Xinhua he expected the railway to bring tangible benefits to his country.
"I wish the China-Laos railway could be completed and put into use as soon as possible. At that time, I can send my son to China for education," Vang said, adding that the project has already brought job opportunities for locals like him.
The five-year construction has a total investment of some 40 billion Chinese yuan (5.8 billion US dollars), 70 percent of which come from Chinese investment and the rest from the Lao side.
The China-Laos railway is the first overseas route connecting with the railway system in China, using Chinese technology, equipment and investment.
The project reflects the accelerating synergy of the China-proposed Belt and Road Initiative and Laos' strategy of transforming itself from a "land-locked" country to a "land-linked" one.